Net income investment tax adjustment for non-passive income (Form 8960)

Katie223 Member Newcomer
edited April 9 in Income

I need to adjust form 8960 to reflect that some of my dividend income was derived in the ordinary course of a trade or business (in other words, that it's non-passive income) and is not subject to net income investment tax. According to the instructions for form 8960 this deduction should go in line 4b.

I found the "Net Investment Income Tax Information" page in FreeTaxUSA and entered the adjustment as a modification to my investment income. The total amount of investment income subject to the net income investment tax is now correct, but the adjustment is showing up in line 7 ("other modifications to investment income") instead of line 4b.

Does it matter which line that adjustment is showing up in? Trying to figure out if I need to upgrade to Deluxe to (hopefully) find out how to move it to line 4b through live chat, or if I'm ok to file as is.


  • MatthewD
    MatthewD FreeTaxUSA Team


    The upgrade to Pro or Deluxe will not make any difference. Our full service Federal return is always available to everyone for free.

    We only support that adjustment just as you described. If you are okay with it reported on line 7 and the bottom line is the same, then that is the way to do it.